NPS and the Contact Centre
A Contact Centre is where the business meets its customer or potential customers, through a plethora of channels; chat, email, voice, video etc. It is the frontline; a crucial point of contact. Measuring a contact centre’s performance is essential, albeit not straight forward. A contact centre can rarely be measured on just one key performance indicator (KPI). As such, there is no single measure that can determine the success of a contact centre. Various metrics, such as, service levels, grade of service, average speed of answer, abandonment rate, average handling time, first call resolution, revenue per call, cost per call etc. are pertinent measures. These can help indicate whether you are on track with providing service levels whilst sustaining a high level of business optimisation.
No two businesses are alike. Hence, no two contact centres are similar. They achieve different goals for different businesses. Even though no one KPI necessarily dictates the success of a contact centre, there is one KPI that has more recently become synonymous with contact centre measurement. And that is the Net Promoter Score (NPS).
NPS was developed by Bain & Company. It first surfaced to mass knowledge in 2003, in the Harvard Business Review article, One Number You Need to Grow. It is now used as a customer loyalty metric by leading brands such as Apple, Amazon, American Express, General Electric, Google, Sony etc. Pertinent to note that an increasing number of organisations in the mid-market and the smaller business sector are also subscribing to NPS as a means to measure customer satisfaction.
What is the Net Promoter Score (NPS)?
The NPS is an index that measures the overall satisfaction of a customer with a company’s products or services. The index range gauges a customer’s loyalty to the brand. It is based on a single-query survey that assesses customer experience (CX) with an aim to improve business efficiency and productivity. The survey itself is either gathered in isolation, or it forms part of a more extensive, but always as a short, customer satisfaction survey.
There are two types of NPS surveys: transactional and relationship. Transactional NPS is executed immediately after a company interacts with a customer. It offers insights into that specific interaction. Relationship NPS is taken intermittently to assess the overall state of customer satisfaction and experience.
How is NPS calculated?
The calculation of NPS boils down to a rather simple question, “How likely is it that you would recommend a company to a friend or colleague?” The answer is ranked on a scale of 0 to 10. Those who promote a business will give a ranking of 9 or 10. Those who remain neutral will provide a ranking of 7 or 8. Those who are likely to complain or share a bad experience with others will rank a company between 0 and 6.
Depending on the rating, customers can be categorised into:
- Detractors: Customers who score equal to or lower than 6. They are likely to recommend the company. Detractors could cause reputational damage through contrary word-of-mouth.
- Passives: These are customers who score 7 or 8. They are not unhappy with the organisation; however, they could move across to a competitor. They would not necessarily cause reputational damage through poor word-of-mouth, but neither would they promote the company.
- Promoters: These customers score 9 or 10, and they love the product or service that the company offers. They would highly recommend it. Promoters are brand-loyal and repeat buyers.
NPS is calculated by subtracting the percentage of customers who are detractors, from the percentage who are promoters. The result generated is NPS; a score between -100 and 100. If when surveyed, all customers score a rating equal to 6, or lower, this would result in an NPS of -100. On the other side of the spectrum, if all customers surveyed scored 9 or 10, the total NPS would then be 100. It is often impossible to reach an NPS of 100. It is essential to benchmark your score against industry competitors. Improving the way your business does things and educating employees on your NPS and the implications of it could motivate them to do more.
After running the survey, an organisation can:
- Segment data across age-groups, long-term customers, and gender.
- Track performance over time to establish certain trends and fluctuations.
- Close the loop by asking follow-up questions as part of the survey to understand the context and reasons for the scoring.
Why is the Net Promoter Score (NPS) relevant and important to Contact Centres?
In today’s ultra-competitive marketplace, customer loyalty is extremely important. It is difficult to secure customers. It is even more difficult to secure long term customers. Gaining customer lifetime value is extremely important for the long-term viability of a business.
The causal factor driving the success of NPS is its simplicity. The potential to gauge customer loyalty and customer satisfaction by asking one question means the NPS can be used more extensively than the more comprehensive (and lengthy) customer satisfaction metrics. NPS can be leveraged after each interaction to get just in time satisfaction scores, or, it can be used across a longer span of time to gauge overall satisfaction. Some organisations send their customers an NPS Survey through a variety of channels, after every interaction a customer makes with the company. Securing results immediately after the interaction garners a higher rate of responses. The organisation gets a ‘real-time’ picture of both the quality of service and the customer’s satisfaction levels. While the ability of NPS to predict future growth can be questioned, there is little doubt in its ability to measure current customer satisfaction.
Even though the NPS survey is rather simple, it provides broad insights into a business. It is a metric that helps measure customer satisfaction by calculating the likelihood of a customer recommending an organisation to another person. Incorporating customer satisfaction as a measure into an overall business strategy has become vitally important for many leading businesses. Word of mouth was always an important channel for businesses to focus on. It is a very trusted way to secure incremental business. In today’s hyper-competitive and digital landscape word of mouth, as a vehicle to secure more customers and revenue, has become even more important. As consumers are inundated with messaging by organisations and they are spoilt for choice, they will likely choose a product or service that has been recommended by those they trust. Tools such as the NPS can help guide the success of businesses.
Businesses rarely know how customers really feel about their brand. Insights from an organisation’s NPS can help an organisation build an excellent customer service strategy; one in which the customer becomes the focal point of the company. It is this ‘customer obsession’ ideology that sets good businesses apart from great ones. With the arrival of social media, it has become even easier for customers to display their dissatisfaction with a business. Businesses, in this era, need to be cognizant of the opinions of their customers to enhance their service offering and stay competitive in an often-unstable economy.
What are the benefits of NPS to a business?
NPS is an excellent customer feedback tool. It is simple, and it is user-friendly. The results of NPS are easy to interpret and gain insights from. Customer service teams can swiftly distribute the data garnered from NPS to the other functional units (such as sales, marketing, engineering etc.)
Many businesses leverage NPS as the central pillar of their feedback collection process. This helps enhance the customer experience over time.
Why should you implement NPS in your contact centre?
A company’s NPS is an on-going exercise to assist in future growth. A contact centre is at the heart of customer service as it is the primary vehicle through which customers interact with the business. NPS helps in customer satisfaction, customer retention and brand loyalty. NPS can be used after every customer interaction, offering businesses real-time insights about both the quality of service and general customer satisfaction.
What is a Good Net Promoter Score?
Net Promoter Scores vary based on a plethora of factors. The industry plays a role, and so does the tenure of the organisation.
Ideally, companies compare their Net Promoter Score to their own past scores so that they can track progress. Companies can also benchmark against competitors’ scores.
Three NPS recommendations for your contact centre
Implementing NPS for your contact centre can be a seamless process. However, NPS is not static. It moves with trends and competitors and shifts with an organisation’s action or inaction. Hence, implementing NPS into the contact centre is just the first step. For NPS to contribute to a contact centre’s success, an ongoing commitment to consistent improvement is required.
Although there is a large list of NPS recommendations. Here are three we recommend to clients we work with:
Focus on driving actual improvements
We recommend that organisations measure NPS, but not for measurement’s sake only. The metrics must drive business improvements. The metrics mean very little unless the business acts upon it with consistency. Organisations must identify patterns to assess where change needs to take place. They must then leverage the NPS to drive the improvements.
Build deeper relationships
NPS helps identify the customers that become brand advocates. Therefore, it is vital to consider what factors drive the scores in the right direction. For the scores and the perception of the business to be positive, companies need to build relationships with their customers. Focusing on the detractors, passives and promoters individually, to find out their specific positive/negative opinions is essential.
NPS is for teams, not individuals
Customer satisfaction is the accountability of the entire business and not just the contact centre. Implement NPS ‘champions’ throughout the whole company, to ensure you align everyone in enhancing the customer experience. Employees need to know their target audience, and this spans the entire customer base – from happy to unhappy customers.
NPS is an excellent tool for open, transparent conversations with customers. It offers businesses a quantitative view of how well a product or service is doing in the market. Customers need to know their satisfaction is essential to your organisation. NPS helps to demonstrate this investment by showing customers that their feedback is welcomed and will be used to enhance the future services you offer. In this way, you build credibility.
With NPS, contact centres can gauge customer satisfaction. With this information, you can enhance service delivery and improve customer satisfaction. As such, the creation of more promoters (customers who are happy with the service/product) is inevitable. Promoters impact business growth in the following ways:
- Promoters make repeat purchases. Renewals are a strong foundation for growth.
- Promoters are more forgiving for any mistakes the business makes, especially if you establish a relationship.
- Promoters are the Holy Grail of organic word-of-mouth promotions.
To sum it up, NPS is a valuable tool for businesses. It forces business owners to consider customer experience as a critical component of overall business strategy in line with revenue and sales. It provides relevant information on the trending perception of the business so that you know what’s working and what needs improvement. Evidence is tangible. NPS should be used in conjunction with the written feedback so that you can understand ratings. This feedback helps to identify focus areas for the business to continuously look at and offers a rising or declining sentiment of your customers.
To get the NPS score exactly where you want it, businesses must:
- go through negative feedback daily.
- ask customers how you can improve further.
- identify promoters who may be at risk.
Successful businesses are data-driven. Uncover, establish, and quantify what your company does well and what it can fix or improve in terms of your customer experience, with real insights. Convert customers’ qualitative reactions into actionable data.
CCNA can help to improve your customers’ experience through the utilisation of NPS. Find out more by visiting https://www.ccna.com.au/services/contact-centre/.